Method and Apparatus for Computer Assisted Settling of Debts

Abstract

A method and apparatus is provided for consumers to receive the recent settlement histories of their creditors in a web-hosted application that drives the settlement process, so they can use this insider knowledge to settle their debts for cents-on-the-dollar. One embodiment provides a computer assisted tool that tells consumers what their creditors take to settle debts for cents-on-the-dollar, and equips consumers to conduct the settlement process using a turn-key, web-hosted application; or alternatively provides a full-service embodiment that allows consumers to get immediate relief from collectors and be debt free in a matter of months rather than decades. The invention thus provides debtors with at least two principal competitive advantages: it provides debtors with knowledge in advance concerning how much credit card companies may take to settle their debts in view of their financial hardships; and it provides consumers with a turn-key method to settle their debts at discounts equivalent to those that professional negotiators could achieve.

1 . A computer implemented method for settling of consumer debts, comprising the steps of: 
 providing consumers with recent settlement histories of the consumers' creditors via a web-hosted application; and    providing said consumers with means for using knowledge of said settlement histories to settle their debts.    
     
     
         2 . The method of  claim 1 , said step of providing said consumers with means for using knowledge of said settlement histories comprising the step of either providing means for said consumers conducting a settlement process via web-hosted application or providing a full-service application that conducts a settlement process on behalf of consumers.  
     
     
         3 . A computer implemented method for settling of consumer debts, comprising the steps of: 
 providing debtors with knowledge in advance concerning how much credit card companies may take to settle their debts in view of the debtors' financial hardships; and    providing said debtors with means for settling their debts at discounts equivalent to those that professional negotiators could achieve.    
     
     
         4 . The method of  claim 3 , further comprising the steps of: 
 aggregating information concerning actual settlement experience from thousands of consumer accounts settled with creditors;    evaluating key characteristics of consumers, said consumers' creditors, an account settled, and actual settlement terms;    analyzing relationships among key characteristics to draw inferences as predictors of creditors' future settlement behavior; and    recommending to consumers a set of expectations to guide their settlement negotiations with each of their creditors based upon results of said analyzing step.    
     
     
         5 . The method of claim. 4 , further comprising the step of: 
 providing consumers online tools for any of: 
 organizing and recording information required to conduct debt settlement negotiations;  
 identifying current creditor contacts who can negotiate debt settlements;  
 creating a record of communications with creditors during the debt settlement negotiation process; and  
 comparing tested settlement and related document templates to actual documentation supplied by creditors in the debt settlement negotiation process.  
   
     
     
         6 . The method of  claim 4 , further comprising the step of: 
 documenting actual debt settlements negotiated to conclusion by consumers for any of: 
 providing consumers with a fail-safe mechanism to record their settlements and to recover documentation reflecting those settlements if needed for future verification; and  
 updating aggregation of information concerning actual settlement experience from other consumer accounts settled with creditors with additional and continually current new settlement information.  
   
     
     
         7 . The method of  claim 4 , further comprising the step of: 
 providing consumers working toward becoming debt free with online resources for any of: 
 tabulating and evaluating their progress;  
 general financial planning reference;  
 budgeting; and wealth building.  
   
     
     
         8 . The method of  claim 4 , further comprising the step of: 
 automatically converting a consumer's online debt settlement negotiating database to a full-service debt settlement program if the consumer finds negotiating directly with creditors to be unduly confusing or difficult, personally unsettling, or unproductive.    
     
     
         9 . The method of  claim 4 , further comprising the step of: 
 providing a website comprising computer implemented tools for settling debt.    
     
     
         10 . The method of  claim 9 , further comprising the step of: 
 said consumer entering a set of information that is used to classify the consumer with regard to such factors a risk of bankruptcy and other factors that are considered by a lender or credit provider when compromising upon amounts owed.    
     
     
         11 . The method of  claim 9 , further comprising the step of: 
 providing said consumer with at least one illustration showing a likelihood of settling said consumer's debt.    
     
     
         12 . The method of  claim 10 , said illustration comprising any of: 
 a debt-to-income ratio which indicates that the consumer should get financial help immediately to reduce debt aggressively;    information showing an unsecured/secured debt ratio; and    a debt settlement ratio which shows the consumer experience-based settlement ratios for various creditors, wherein the consumer is provided with an anticipated settlement amount and an effective anticipated settlement ratio.    
     
     
         13 . The method of  claim 9 , further comprising the step of: 
 providing a case list of creditors and their respective claims.    
     
     
         14 . The method of  claim 9 , further comprising the step of: 
 providing an employment hardship a field for said consumer to enter a narrative describing the consumer's circumstances.    
     
     
         15 . The method of  claim 9 , further comprising the step of: 
 providing a plurality of canned letters organized by category for use by said consumer.    
     
     
         16 . A computer implemented method for settling of consumer debts, comprising the steps of: 
 providing a consumer with a website for settling of consumer debts;    optionally offering the consumer free financial check-up (FFC) including information about any of the consumer's income, expenses, assets, and secured and unsecured liabilities ( 93 );    analyzing the consumer's input and produces an FFC output including any of a debt-to-income ratio, secured/unsecured debt allocation, an aggregate debt settlement ratio that is anticipated for all unsecured debts (ADSR), and a financial outlook recommendation.    
     
     
         17 . The method of  claim 16 , wherein said FFC output comprises any of: 
 recommending that the consumer maintain status quo and periodically visit the website;    recommending an accelerated loan principal reduction (ALPR), wherein the consumer registers for ALPR and the FFC input previously entered by the consumer is automatically transferred for processing as an ALPR output, wherein the consumer is then provided with information comprising any of amortization comparisons, the effect of making minimum payments vs. fixed payments vs. extra payments, the effect of making accelerated payments to one creditor vs. another creditor, and strategies for the shortest time to total payoff of debt; and    recommending debt settlement, wherein the consumer registers for debt settlement and the FFC input previously entered by the consumer is automatically transferred for processing, wherein the consumer adds profile information and receives an ADSR, and wherein the consumer can settle his debts using the ADSR and a debt management customer relations management (CRM) system, the consumer having the option of completing the process of settling all debts or the consumer can decide not to finish settling all debts directly and can, instead, enroll in a debt management program with a full service company, in which event all of the consumer's information is automatically transferred to the full service company.    
     
     
         18 . An apparatus for determining an aggregate debt settlement ratio (ADSR), comprising: 
 a Debt Settlement Database;    a Consumer Database;    wherein said Debt Settlement Database and said Consumer Database associate debt settlements and consumers owing the debts settled; and    an ADSR Algorithm for determining said ADSR by comparing: 
 characteristics of debt in question to other debts actually settled by a creditor holding the debt in question, and  
 characteristics of the debt in question to similar debts actually settled by other Creditors, and  
 characteristics of a consumer owing the debt in question to other consumers whose debts were settled by the creditor holding the debt in question, and  
 characteristics of the consumer owing the debt in question to similar consumers whose debts were settled by other creditors.  
   
     
     
         19 . The apparatus of  claim 18 , wherein settlement ratios of the comparison settled debts are weighted according to relevance of characteristic selectors, and wherein said weighted ratios are then summed to produce the ADSR for the debt in question.  
     
     
         20 . The apparatus of  claim 19 , wherein said relevance is determined by a continuing comparison of an actual settlement ratio for a debt and the ADSR for the same debt, derived in part by the effect of the relevance factor applied in determining the ADSR for the debt in question.  
     
     
         21 . The apparatus of  claim 18 , further comprising: 
 one or more calculators and tools for any of: 
 calculating debt-to-equity ratio;  
 calculating unsecured debt-to-income ratio;  
 calculating secured and unsecured debt pay-down as functions of minimum payments, accelerated payments (user input), or per current budget;  
 calculating accelerated pay-down that shows how quickly all unsecured debt or both secured and unsecured debt can be paid down using a combination of interest reduction and weighted pay-down on higher interest liabilities  
 providing an alert or query and calculate-on-demand service to notify a consumer when market conditions reported by other consumers with the same creditor(s) suggest an interest rate reduction may be available, which should be pursued and, if successful, could change the consumer's pay down priorities;  
 entering and storing income and expenses and, from there, calculating a budget that allows the consumer to modify any element (increase, decrease, eliminate) or add or delete elements on either side (income or expense) and see what their monthly cash flow is;  
 providing a compound interest calculator for CC debt to illustrate how much of a pay-down is interest and how much is principle;  
 providing a real-cost calculator;  
 providing a financial leverage calculator.;  
 providing an opportunity cost calculator;  
 providing a compound interest calculator;  
 providing an investment return calculator;  
 viewing charts over time of major banks and what average interest rates they are offering others, cross referenced with any of income brackets, debt-to-equity ratios, and debt-to-income ratios with comparisons to said consumer's own parameters in these areas;  
 reporting of credit card solicitations;  
 providing a comparison of credit card agreements, including any of overall complexity, late payment charges, remedies for default, monthly service fees applied, and sticky clauses;  
 viewing charts over time of major banks' willingness to drop interest rates as consumers get their rates lowered, improve income or ratios, or switch to different banks;  
 viewing charts over time of major banks' willingness to settle accounts for less than the full balance, along with sub-charting of a proportion of deals that are paid in six months vs. longer;  
 sending, receiving, and storing faxes to/from creditors via a partner;  
 sending, receiving, and storing email to/from creditors via a partner;  
 using a phone database to contact creditors by phone and log calls with notes;  
 using an address database to contact creditors by standard surface mail and log letters with notes;  
 locating a partner to provide separate contact phone and voicemail solely for a negotiation process;  
 a graphical letterhead that is randomized from a set of templates, or customizable, for communication via fax or mail;  
 a tool for crafting letters according to a set of categories;  
 pop-ups for certain criteria concerning ratios, creditor mix/amounts, or opportunities, including any of high volume of low settlements by creditors they have accounts with, or settlements or interest rate concessions that meet targets set by the consumer;  
 email alerts for creditor concessions in settlements and interest rates that meet a target set by the consumer;  
 determining consumer concession targets by taking into account the consumer's budget;  
 time value of money calculator and chart; and  
 a decision tool to aid consumers in determining which path is best for them given all relevant inputs.  
   
     
     
         22 . The apparatus of  claim 18 , further comprising: 
 means for providing graphical representations to chart creditor activity in terms of offers and concessions in interest and principal, as well as any of consumer progress for secured debt pay-down, unsecured debt pay-down, total debt pay-down, settlement, wealth building using debt or financial leverage, and any of collection-action rates, arbitration rates, and litigation rates.